The Kurita Group’s Sustainability and Materiality
Learn about the Kurita Group's sustainability, the process for identifying materiality, metrics and targets, and promotion and governance system.
The Kurita Group’s Sustainability and Materiality
The Kurita Group views sustainability as corporate activities within the natural environment and social systems, and the pursuit of sustainable growth taking into account the impact of corporate activities on the environment and social systems, and vice versa. It positions sustainability at the core of business management.
In addition, the Kurita Group’s vision is “Pioneering ‘new value for water’ to contribute to the realization of a sustainable society.” To achieve this vision, we will identify key issues for each medium-term management plan based on global challenges related to sustainability, define them as the “Kurita Group's Materiality,” and set metrics and targets to address it.
Materiality Identification Process
The materiality identification process is as follows.
Step 1: Identification of Sustainability Issues
The Kurita Group comprehensively selects sustainability issues across 37 themes as materiality candidates, referencing international rules*1, laws and regulations, disclosure standards*2, and issues identified through stakeholder engagement*3.
- International rules: SDGs, Ten Principles of the UN Global Compact, OECD Guidelines for Multinational Enterprises, World Economic Forum's Global Risks Report
- Laws, regulations and disclosure standards: GRI Standards, GHG Protocol, SASB Standards, EU Taxonomy, SFDR, CSRD, TCFD, TNFD, etc.
- Stakeholder engagement: Responses to surveys by customers, results of supplier surveys, results of employee engagement surveys, information meetings for shareholders and investors, responses to ESG surveys, social contribution activities, etc.
Step 2: Creation of Materiality Matrix
E&S Committee* members, External Directors, Audit & Supervisory Board members, and the E&S Committee* Secretariat were surveyed to assess the degree of positive and negative impact (probability and scale of impact) from two perspectives:
1. Impact of sustainability issues on the Kurita Group's corporate value (financial materiality)
2. Social and environmental impact of the Kurita Group's initiatives in response to sustainability issues (impact materiality)
The results of the survey were organized in a matrix along two axes: (1) above on the X-axis/horizontal axis, and (2) above on the Y-axis/vertical axis. Themes with a significant impact in both the X and Y axes were selected as materiality candidates. The candidates were grouped into seven main themes and five sub-themes covering common issues in multiple areas of materiality.
- Refers to the institution before June 29, 2023, when the Articles of Incorporation were partially amended. E&S Committee is the former name of the current Sustainability Committee.
Step 3: Confirmation of Adequacy and Selection of Materiality
Materiality candidates selected in Step 2 were submitted to the Executive Committee and the Board of Directors* for input. The committee responsible for reviewing the medium-term management plan, which is mainly comprised of members of the Executive Committee, confirmed the adequacy of the materiality candidates in parallel with the formulation of the PSV-27 Plan, finalized the Group’s eight material issues and categorized them into two: “Basic Themes” that should serve as the foundation for management and business activities, and “Shared Value Themes” that lead to the creation of shared value with society. These material issues were then approved by the Board of Directors as the “Kurita Group’s Materiality.”
- Refers to the institution before June 29, 2023, when the Articles of Incorporation were partially amended.
Materiality Metrics and Targets
The metrics and targets of the Kurita Group's Materiality were formulated by the organizations in charge of each metrics and discussed by the E&S Committee (the former name of the current Sustainability Committee) and the committee responsible for reviewing the medium-term management plan, and subsequently approved by the Board of Directors. These metrics and targets are organically integrated with the strategies of the PSV-27 Plan. The initiatives addressing materiality play a crucial role in achieving the goals of PSV-27, including the promotion of CSV business, which is a common approach across all Shared Value Themes.
Shared Value Themes
| 1. Solve issues related to water resources | |||||
|---|---|---|---|---|---|
| Strive to solve issues related to water resources in the aspects of the quantity, quality, and accessibility by providing solutions that harness water knowledge and by collaborating with various organizations, and maintain appropriate water circulation as the ecosystem services. | |||||
| Metrics | Targets（Upper row） and Results（Lower row） | ||||
| FY2024 | FY2025 *2 | FY2026 | FY2028 | FY2031 | |
| Total Number of Basins Where Collective Actions are Implemented and Total Population in the Basins | 3 basins, 130 million people | 3 basins, 93 million people | 4 basins, 160 million people | 5 basins, 600 million people | 7 basins, 700 million people |
| Not achieved (3 basins, 93 million people) |
|||||
| Amount of Water Savings through CSV Business | 125 million m³ | 135 million m³ | 200 million m³ | 300 million m³ | - |
| Not achieved (111 million m³ ) |
- | ||||
| Rate of reduction in the ratio of GHG emissions to water savings*1 through CSV business (compared to FY2023) | 5% | 20% | 35% | 50% | - |
| Not Achieved (-18.0% (0.017t-CO 2 /m³ )) |
- | ||||
| Rate of reduction of water withdrawal intensity (compared to FY2023, excluding the ultrapure water supply business) | 7% | 21% | 23% *2 | 27% *2 | - |
| Achieved (18.2%) |
- | ||||
| Number of individuals, organizations and groups we engage with to raise awareness on water resources | Meet or exceed the previous year | Meet or exceed the previous year | Meet or exceed the previous year | Meet or exceed the previous year | - |
| Achieved | - | ||||
| 2. Contribute to the realization of a decarbonized society | ||||||
|---|---|---|---|---|---|---|
| Contribute to the realization of a decarbonized society in the overall supply chain by developing and providing solutions that help reduce GHG emissions in industries and society and by implementing low-carbon business activities. | ||||||
| Metrics | Targets（Upper row） and Results（Lower row） | |||||
| FY2024 | FY2025 *2 | FY2026 | FY2028 | FY2031 | FY2051 | |
| Rate of reduction in Scope 1+2 emissions (compared to FY2020) | 17% | 50% | 52% | 73% | 80% *3 | Net-Zero |
| Achieved (21.2%) |
||||||
| Rate of reduction in Scope 3 emissions (compared to FY2020) | 11% | 14% | 17% | 22% | 30% | Net-Zero |
| Not achieved (-56.7%) | ||||||
| Avoided GHG emissions through CSV business | 630 thousand t | 900 thousand t | 1,100 thousand t*2 | 1,600 thousand t*2 | - | - |
| Achieved (733 thousand t) |
- | - | ||||
| 3. Contribute to building a circular economy society | ||||
|---|---|---|---|---|
| Contribute to building sustainable industries and society and preventing and reversing the nature loss by developing and providing products and services that make effective use of and reuse limited resources and recyclable resources in optimal ways. | ||||
| Metrics | Targets（Upper row） and Results（Lower row） | |||
| FY2024 | FY2025 *2 | FY2026 | FY2028 | |
| Rate of increase in resource recovery or reduction of resource input through CSV business(compared to FY2023) | 30% | 65% | 100% | 300% |
| Not achieved (-2%) |
||||
| In-house waste recycling rate | Meet or exceed the previous year | Meet or exceed the previous year | Meet or exceed the previous year | Meet or exceed the previous year |
| Achieved | ||||
Basic themes
| 4. Develop and disseminate innovative products, technologies, and business models | ||||
|---|---|---|---|---|
| Contribute to sustainable development of society by striving to develop and disseminate innovative products, technologies, and business models that help solve social issues, through collaborations of various people and organizations inside and outside the Group. | ||||
| Metrics | Targets（Upper row） and Results（Lower row） | |||
| FY2024 | FY2025 *2 | FY2026 | FY2028 | |
| Proportion of investment in innovative areas *4 | 15% | 20% | 25% | 30% |
| Achieved （18%） |
||||
| Proportion of themes in innovative areas *4 | 20% | 23% | 30% | 30% |
| Achieved （22%） |
||||
| Number of stakeholders engagements in innovation areas *4 | Meet or exceed the previous year | Meet or exceed the previous year | Meet or exceed the previous year | Meet or exceed the previous year |
| Achieved | ||||
| 5.Strategic development and utilization of human resources | ||||
|---|---|---|---|---|
| Secure, develop and utilize diverse human resources who understand our Corporate Philosophy to remain a corporate group where each individual person demonstrates their capabilities and which works to maximize customer value and create shared value with society. | ||||
| Metrics | Targets（Upper row） and Results（Lower row） | |||
| FY2024 | FY2025 *2 | FY2026 | FY2028 | |
| Engagement score(a. Rate of companies above the average of all industries, b. Score of each company surveyed) | a.50% b. Meet or exceed the previous survey |
- *5 | a.65% b. Meet or exceed the previous survey |
a.75% b. Meet or exceed the previous survey |
| a. Achieved （51%） b. Achieved （41%(+3pt from the previous research)） |
||||
| Rate of [women, foreigners, and experienced personnel] Among Executives of the Company | 30% | Meet or exceed the previous year | 35% | 40% |
| Not Achieved (29.4%) |
||||
| Fill Rate of Human Resources for Development, Digital, and Intellectual Property | 65% | 70% | 75% | 80% |
| Achieved (65%) |
||||
| 6. Provide highly safe and quality products and services | ||||
|---|---|---|---|---|
| Create products and services and continue to make improvements for securing quality and safety, based on information obtained from diverse points of contact with sites, thus increasing social confidence. | ||||
| Metrics | Targets（Upper row） and Results（Lower row） | |||
| FY2024 | FY2025 *2 | FY2026 | FY2028 | |
| Percentage reduction in recurrence rate of accidents that affect customers and society *6 (compared to previous year) | 30% |
30% | 20% | 20% |
| Achieved (33%) |
||||
| 7.Conduct business activities respecting human rights | ||||
|---|---|---|---|---|
| Aim to respect human rights of all the people as an initiative on “humanity” in “an environment in which nature and humanity are in harmony,” based on international norms related human rights. | ||||
| Metrics | Targets（Upper row） and Results（Lower row） | |||
| FY2024 | FY2025 *2 | FY2026 | FY2028 | |
| Conducting Human Rights Due Diligence on Suppliers | Continuous implementation | Continuous implementation | Continuous implementation | Continuous implementation |
| Achieved | ||||
| Occupational safety severity rate *7 (our company and domestic group companies) | 0.005 or less | 0.005 or less | 0.005 or less | 0.005 or less |
| Not Achieved （0.035） |
||||
| Rate of participation in human rights-related training | 100% | 100% | 100% | 100% |
| Achieved （100%） |
||||
| Establishment of a liaison for remedies from human rights violations (grievance mechanism) |
- *8 | - *8 | - *8 | Completed |
| - | ||||
| 8. Conduct fair business activities | ||||
|---|---|---|---|---|
| Take actions with fairness, transparency, and integrity and work fairly, thus making people working for Kurita Group prouder of their work and continuously increasing social confidence. | ||||
| Metrics | Targets（Upper row） and Results（Lower row） | |||
| FY2024 | FY2025 *2 | FY2026 | FY2028 | |
| Rate of participation in whistle-blowing system related training | 100% | 100% | 100% | 100% |
| Achieved （100%） |
||||
| Rate of participation in training related to laws and internal rules for the compliance of anti-bribery and antitrust laws, etc. | 100% | 100% | 100% | 100% |
| Achieved （100%） |
||||
| Number of violations of anti-bribery and antitrust laws | (0 cases) | (0 cases) | (0 cases) | (0 cases) |
| Achieved (0 cases) |
||||
- This figure represents Kurita Group’s Scope 3 categories 11 and 13, divided by the amount of water conservation achieved through CSV businesses involving water treatment equipment (which generate Scope 3 categories 11 and 13 emissions).
- The targets for fiscal 2025 were reviewed by the Sustainability Committee and decided by the Executive Committee. The target for fiscal 2026 and fiscal 2028 were revised upwards from the initial target based on the target for fiscal 2025 and approved by the Board of Directors.
- Previously, the target was set to achieve a 100% reduction, including the purchase of carbon credits. However, to align with international consensus, we have changed our target to an 80% reduction through means that meet the requirements for SBT certification as of October 29, 2024.
- This refers to the "innovation area" in Deloitte 7cells℠ (Deloitte's approach to formulating growth strategies).
- An engagement survey is conducted every two years, with the next one scheduled for FY2026.
- The company will be the target in fiscal 2024. The targets will be expanded to group companies in Japan in fiscal 2026 and to the Kurita Group in fiscal 2027.
- Metrics and targets in countries other than Japan will be set separately by fiscal 2026 based on local laws and regulations and other criteria.
- Conduct surveys, etc. from fiscal 2024 to 2026 would be prepared for establishment by fiscal 2028. After establishment, set targets related to raising awareness.
Stakeholder Engagement
The Kurita Group engages with stakeholders – customers, business partners, employees, shareholders and investors, and local communities – and uses their expectations, concerns and feedback to adequacy of the “Kurita Group’s Materiality” and its metrics and targets. The information is also reflected in activities to achieve the targets.
The Sustainability Committee compiles all the information from each engagement activity conducted by relevant departments and reflects it in the initiatives outlined above.
| Stakeholder | Engagement method |
|---|---|
| Customers |
|
| Business partners |
|
| Employees |
|
| Investor Relations |
|
| Local communities |
|
Results in FY2024
| Stakeholder | Results of Engagement | Issues Going Forward | |
|---|---|---|---|
| Customers | Responding to surveys from customers and supplier evaluation organizations | Responded to all surveys both directly from customers and through supplier evaluation agencies. EcoVadis, one of the supplier evaluation agencies, awarded us a “Silver Medal,” which indicates that we are in the top 15% of all companies assessed. In addition, we have corrected the issues raised by individual customers. | We will continue to improve the initiatives within the Group and our supply chain, by understanding the standards referenced by our customers and analyzing the evaluation results from supplier assessment organizations. |
| Interviews during the development phase of products, technologies, and business models | Conducted customer interviews and incorporated the results into the decision-making criteria within the development process. This led to the review of development content and the making of go-stop decisions across multiple development themes. Additionally, we secured interviewees and refined the content of the interviews. |
We will continue our efforts to ensure that confirmation against the criteria in the hearing and development process does not become a formality. | |
| Communication through customer surveys and proposal activities | Conducted NPS®*1 surveys and received responses from 1,547 customers from all over the world. We identified items with relatively low satisfaction and a high correlation with recommendation as urgent improvement items. These items were communicated to relevant departments to reflect in their initiatives. | We will continue to improve our survey methodology so that we can also identify expectations and issues related to the initiatives of Kurita Group's sustainability. | |
| Business partners | Responding to surveys with our business partners and through supplier evaluation organizations. | Conducted surveys with our business partners and addressed consultation items and issues. We also provided guidance and re-audited business partners identified as high-risk based on their response to EcoVadis. As a result, the average score of our business partners assessed by EcoVadis increased from the previous year. The number of newly registered and assessed business partners also increased by 27, bringing the total number of domestic and international suppliers to 150. | We will continue our efforts to increase the number of suppliers assessed by EcoVadis and to address identified risks. |
| Ensure anonymous consultation and reporting through the helpline for business partners | Distributed leaflets about the helpline for business partners to raise awareness of its availability. | We will continue to improve our guidance to increase their intention for use. | |
| Investigation and correction of potential human rights risks through the implementation of human rights due diligence. | As part of our human rights due diligence, we assessed the working conditions of technical interns trainees at multiple business partners to identify any issues. Additionally, we investigated the records of raw materials, including conflict minerals, and the smelters used by suppliers with large procurement of electronic parts. | We will continue to understand the actual situation and work on promoting corrective actions with our business partners to resolve the identified issues | |
| Employees | Conducting employee engagement surveys | Conducted employee engagement surveys to 6,790 employees s globally, receiving 5,800 responses. Additionally, we formulated measures and launched initiatives, so each organization analyze the survey results, identify and improve organizational issues. | We will continue to work on the measures set to improve engagement and promote D&I. |
| Dialogue with employees through self-assessment system, etc. | Enhanced dialogue between employees and supervisors using tools to visualize human resource characteristics and mental states. We also revised the content of questions in the self-assessment system and strengthened support for employees to achieve their career goals | We will continue to develop an environment in which employees can grow while developing their careers autonomously. | |
| Set up a contact for whistleblowing and compliance consultation Desk to accept anonymous consultations and whistleblowing. | Provided training on how to use whistle-blowing and compliance consultation desk to new employees and newly accepted temporary staff. | We will continue to improve usability and continuously raise awareness. | |
| Investor Relations | Dialogue with shareholders and investors by holding various information meetings, participating in conferences, and conducting road shows; individual dialogue with securities analysts and institutional investors through interviews and teleconferences | Increased the number of meetings with shareholders and investors at overseas IR and conferences and expanded the number of speakers beyond the President and CFO and deepened the dialogue to utilize constructive dialogue from a medium- to long-term perspective for management. We have also revised the method of accepting questions in advance at the general shareholders' meeting to gather more questions from shareholders. | We will continue to enhance opportunities for dialogue with shareholders and investors. |
| Responding to surveys from ESG evaluation organizations, etc. | Responded to surveys from ESG evaluation organizations. We have continued to be selected as a constituent of leading ESG indices, including in all ESG indices used by the GPIF. | We will continue to improve our initiatives, including the Kurita Group's internal systems and supply chain, through analysis of evaluation results by ESG evaluation organizations. We will also strengthen our response to international sustainability information disclosure standards and other regulations. | |
| Local communities | Confirmation of complaints and acknowledgements received at business locations | There were zero complaints or acknowledgements. | We will continue to confirm the local input for each location. |
| Contribution to the promotion of science and technology related to water and the environment through dation for Kurita Water and Environment Foundation | Continued to contribute to and support the Foundation. The Foundation's domestic and international research grants totaled 185, up 30 from the previous fiscal year. | We will continue to support the Foundation by checking the status of its research grant activities. | |
| Collaboration with external organizations through corporate citizenship activities such as improving water resources and public health issues and fostering the next generation | Implemented initiatives to solve water resource issues in three watersheds in the United States, Brazil, and Indonesia as part of the WRC*2 activities. In addition, in collaboration with several NPOs and with the participation of the Kurita Group employees, we carried out social contribution activities related to blue carbon and biodiversity, such as eelgrass cultivation and wetland restoration. | We will continue to work to continue and expand our activities for the conservation of nature, including water resources. | |
| Activities related to nature conservation, welfare, disaster prevention, etc. in the areas where our business bases are located, and support for disaster-stricken areas in the event of disasters or conflicts | Donated 10 million yen to the Noto Peninsula Earthquake Relief Program conducted by Japan Platform, a non-profit organization, to support areas affected by the 2024 Noto earthquake. In addition, through local governments and NPOs, we installed three Kurita Creation Co., Ltd.'s disaster water supply units in Nanao and Wajima cities and provided drinking water in response to customer requests. | We will work to improve our systems so that the Kurita Group can provide effective and integrated support in the event of a disaster or conflict. | |
- NPS℠ is the registered trademark or service mark of Bain & Company, Fred Reichheld, and Satmetrix Systems.
- This is a new organization established by the CEO Water Mandate, an initiative of the United Nations Global Compact, and is working under the leadership of industry to conserve and restore water resources in river basins around the world where water resources issues are serious.
Promotion and Governance System
In the Kurita Group, the Sustainability Committee chaired by the Executive General Manager of the Sustainability Division, a Corporate Officer of the Company, oversees and promotes the Group’s initiatives. The Sustainability Committee discusses or reports on the status of the initiatives to the Executive Committee twice a year in principle, and the Executive Committee deliberates and decides on necessary measures. Additionally, the Executive Committee reports on the status of initiatives to the Board of Directors, which oversees initiatives related to materialities. The Sustainability Advisory Council examines and deliberates on the Company's approach to sustainability management from a multi-stakeholder, medium- to long-term perspective, taking into account global circumstances surrounding sustainability, and provides advice and reports to the Board of Directors.
PDCA
The Kurita Group sets Groupwide medium-term targets and fiscal-year targets for each activity related to the Kurita Group’s Materiality and its metrics and targets. Revisions to action plans for each fiscal year and to metrics and targets, where necessary, are prepared by the organizations in charge, discussed by the Sustainability Committee, and finalized by the Executive Committee. The Sustainability Committee and the Executive Committee evaluate the outcomes of the activities.
External Evaluation
Inclusion in ESG Indexes
FTSE4Good Index Series
This index was developed by FTSE Russell, a global index provider based in the United Kingdom. The FTSE4Good Index Series is designed to promote investment in companies that meet global environmental, social, and governance (ESG) standards.(As of June 2024)
FTSE Blossom Japan Index
This index was developed by FTSE Russel. The FTSE Blossom Japan Index is designed to measure the performance of Japanese companies that are making outstanding efforts on ESG.
FTSE Blossom Japan Sector Relative Index
This index was designed by FTSE Russell, as a sector neutral benchmark that reflects the performance of Japanese companies demonstrating strong environmental, social and governance practices (ESG). Also, the index is designed to support the transition to a low carbon economy by evaluating companies’ climate governance activities aligned with the Taskforce on Climate-related Financial Disclosures’ (TCFD) recommendations and carbon emissions intensity to determine stock eligibility for index inclusion. (As of June 2024)
MSCI NIHONKABU ESG Select Leaders
This index was developed by MSCI. This index is composed of Japanese companies with excellent ESG evaluation among the constituents of the IMI Index without any bias toward any industry sector. (As of June 2024)
- Our inclusion in any MSCI index, and the use of any MSCI logo, trademark, service mark or index name on this page does not constitute a sponsorship, endorsement or promotion of us by MSCI or its affiliates. Exclusive Ownership of MSCI: MSCI, the MSCI index names and logos are trademarks or service marks of MSCI or its affiliates.
The MSCI Japan Empowering Women Index(WIN)
This index was developed by MSCI. It is composed of companies in the MSCI IMI Top 500 Index that have been selected based on their data regarding employment of women, disclosed under the Act on Promotion of Women’s Participation and Advancement in the Workplace and corporate policies regarding gender diversity. (As of June 2024)
- Our inclusion in any MSCI index, and the use of any MSCI logo, trademark, service mark or index name on this page does not constitute a sponsorship, endorsement or promotion of us by MSCI or its affiliates. Exclusive Ownership of MSCI: MSCI, the MSCI index names and logos are trademarks or service marks of MSCI or its affiliates.
SOMPO Sustainability Index
This index was developed by Sompo Asset Management Co., Ltd., a Japanese asset management company. The index is composed of independently selected stocks, emphasizing their ESG evaluation based on the Buna-no-Mori Environmental Questionnaire (environmental assessment) conducted by Sompo Risk Management Inc. and the IntegreX Survey (social and corporate governance assessments) conducted by Integrex Inc. (As of June 2024)
S&P/JPX Carbon Efficient Index
The index is jointly developed, calculated and published by S&P Dow Jones Indexes, Inc. and Japan Exchange Group. Based on TOPIX component stocks, the weight of the constituents is determined based on the disclosure status of environmental information and the level of carbon efficiency (carbon emissions per sales). (As of June 2024)
Evaluation by ESG Rating Organization
ISS-ESG
Certified as a “Prime” company in the ESG ratings of ISS ESG, the Responsible Investment division of US-based proxy advisory firm Institutional Shareholder Services. Prime status indicates that Kurita exceeded industry-specific rating criteria. (As of July 2024)
Evaluation by Supplier Evaluation Organization
EcoVadis
Awarded the Silver Medal, indicating a ranking in the top 15% of all companies in all industries, by EcoVadis, a French firm that rates the sustainable procurement capabilities of suppliers from a sustainability perspective. (As of July 2024)
Evaluation by Creating a Corporate Culture that Facilitates Work
Platinum Kurumin
This is a system in which the Minister of Health, Labour and Welfare of Japan certifies outstanding companies that work to support the balance between work and childcare. (Certified in 2024)
Class 3 Eruboshi
This is a system in which the Minister of Health, Labour and Welfare of Japan certifies as a "company promoting the active participation of women" based on the Act on Promotion of Women's Participation and Advancement in the Workplace. (Certified in 2022)
